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20/12/2006 20:19

Not Legal

Hi All,

I have just been provided with my new employment contract. In it, there is a clause that prohibits me from working with my employers direct or indirect competitors or even their customers for six months after termination. In affect, this means I will not be able to work in the consultancy business for six months, should I (or even them) terminate the contract.

Is this usual. I intend to negotiate this - saying I am happy to go with three months notice that and change clauses that hint provisions such as above.

Has any one had the same experience. Your thoughts are greatly appreciate.


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20/12/2006 20:55

NewExpHire to Not Legal (#1)

I think you are referring to clause 18.2.1 - and the last line states 'except where such services are rendered as an employee of the Restricted Client' - which means that if you are employed by the competitor, then this clause does not apply.

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20/12/2006 22:34

ben to NewExpHire (#2)

i think the clause is voidable in contract law as it fetters one's economic right to seek employment.

in the extreme, you can simply ignore the provision and get yourself employed by your firm's competitors or clients. it is then up to your firm to enforce the provision and bring the matter be4 the court, which might be unlikely given the possible damage to its reputation.

however, this prohibition could surface as an industrial convention and your name may smear bad reputation, as a result.

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21/12/2006 08:16

LAB to Not Legal (#1)

I have had similar clauses in previous consulting jobs (more than one) and also in separation contracts (on leaving). In all cases, I have negotiated these out or limited them to direct clients (i.e. people not companies - how can they seek to prevent you working for say BP globally - Nonsense!). It has been proven that they are not enforcable in law. It has never been a make or break issue and seemed to be more of a "standard HR clause".

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21/12/2006 11:34

Gila to Not Legal (#1)

Kinda of a standard clause.. (It was in my contract with 2 previous employers - both major consulting firms). However, very difficult, if not impossible to enforce.

As a matter of fact I have direct experience of that... roughly 3 years ago' with 3 colleagues of mine we left our then employer (a major Consulting firm) and set up a shop in Scandinavia. Of course we took some clients with us as well (and I mean major clients, expecially for the Scandinavian business). The company tried to legally enforce the clause and we were all sent a letter reminding us of our contractual obligations; a 12 month non competing clause (whereby for 12 months after you leave you cannot work for any client you have worked for, over the previous 12 months - either directly employed or on behalf of a competitor unless authorized to do so). We sought legal advice ( I had to do it in the UK because they wanted to take me to court here in England) and we were told that very often these letters are not followed up with "real" legal action, and are only meant to scare people off, as companies do not like negative pubblicity.

What we did then was to ask our the largest client (a major corporation in Scandinavia) to write to our previous employer stating that the wanted to be free to hire whoever they wanted (in this case us) and unless they immediately stopped the bullying they would never ever do any more business them.

It worked ... never heard of the guys in Victoria again!!


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21/12/2006 14:36

A Mars a day... to Not Legal (#1)

Under law any issue of a succession of contract the same employer, provided this is issued to you in continuous employment, must constitute an improvement in terms unless you agree otherwise, and these terms must be an 'improvement' as most 'reasonable' people would interpret this. Essentially you are not obliged to sign this contract as it seems to impose a denigration of terms; frankly I think it would be unenforceable anyway.

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